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how_do_we_know_where_we_are_spending_our_money [2019/06/05 14:13] – Edited for clean. hpsamioshow_do_we_know_where_we_are_spending_our_money [2019/06/13 14:54] – Cleaned up formatting hpsamios
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 Organizations will often be interested in how much they are investing in different time horizons of a product / solution. Are we investing the right amount in evaluating new products, in comparison to retiring existing products. Example tags (using standard SAFe discussion) on (for example) Epics might include: Organizations will often be interested in how much they are investing in different time horizons of a product / solution. Are we investing the right amount in evaluating new products, in comparison to retiring existing products. Example tags (using standard SAFe discussion) on (for example) Epics might include:
  
-* Evaluating: investments aimed at potential new solutions, where we will get to a “stop, pivot or persevere” decision. +  * Evaluating: investments aimed at potential new solutions, where we will get to a “stop, pivot or persevere” decision. 
-* Emerging: evaluation will lead to identification of some promising new solutions that we want to continue to invest. +  * Emerging: evaluation will lead to identification of some promising new solutions that we want to continue to invest. 
-* Investing: investments requiring significant on going investment because of volatility in the environment. +  * Investing: investments requiring significant on going investment because of volatility in the environment. 
-* Extracting: investments that are part of our stable offering. +  * Extracting: investments that are part of our stable offering. 
-* Retiring: investment required to decommission a deployed solution +  * Retiring: investment required to decommission a deployed solution 
  
 ===== Centralized vs Decentralized Decision Making ===== ===== Centralized vs Decentralized Decision Making =====
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 Organizations often want to understand what kind of decisions we are making at what kind of levels. For agile transformations, there is a desire to de-centralize decision making as far as possible. An example tag on Features to track this might include: Organizations often want to understand what kind of decisions we are making at what kind of levels. For agile transformations, there is a desire to de-centralize decision making as far as possible. An example tag on Features to track this might include:
  
-* Portfolio: work initiated and prioritized at the program level +  * Portfolio: work initiated and prioritized at the program level 
-* Program: work initiated and prioritized at the program level+  * Program: work initiated and prioritized at the program level
  
 ===== Strategic Theme ===== ===== Strategic Theme =====
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 Organizations often want to understand how the capacity used maps back to the strategic themes of the organization. For example, you might see tags on Epics that reflect: Organizations often want to understand how the capacity used maps back to the strategic themes of the organization. For example, you might see tags on Epics that reflect:
  
-* Automation +  * Automation 
-* Strategic theme 2 +  * Strategic theme 2 
-* And so on ...+  * And so on ...
  
 ===== Leading Indicators =====  ===== Leading Indicators ===== 
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 Organizations often need to understand whether they are heading in the right direction for an initiative well before the customer realizes the value. This often means identifying leading indicators, metrics that we believe means that if they head in the right direction, the outcome to the customer will be realized. Tagging Epics to reflect these indicators could help with calculation. Organizations often need to understand whether they are heading in the right direction for an initiative well before the customer realizes the value. This often means identifying leading indicators, metrics that we believe means that if they head in the right direction, the outcome to the customer will be realized. Tagging Epics to reflect these indicators could help with calculation.
  
-* Percentage of deployed epics +  * Percentage of deployed epics 
-* Percentage of epics associated with key initiative +  * Percentage of epics associated with key initiative 
-* Leading indicator 3 +  * Leading indicator 3 
-* And so on ...+  * And so on ...
  
 ===== Capitalization =====  ===== Capitalization ===== 
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 Organizations typically operate out of two budgets; a capital budget and an operating budget. If it comes out of the capital budget, then we can defer the recognition of these costs until we actually start selling the result of the effort. If it comes out of the operating budget, the costs drop straight to the bottom line affecting your profitability immediately. Tags we could apply to Features could simply be: Organizations typically operate out of two budgets; a capital budget and an operating budget. If it comes out of the capital budget, then we can defer the recognition of these costs until we actually start selling the result of the effort. If it comes out of the operating budget, the costs drop straight to the bottom line affecting your profitability immediately. Tags we could apply to Features could simply be:
  
-* Capital budget +  * Capital budget 
-* Operating budget+  * Operating budget
  
 See [Agile Software Capitalization](http://www.hanssamios.com/dokuwiki/how_do_we_do_software_capitalization_when_we_go_to_agile) for more on this subject. See [Agile Software Capitalization](http://www.hanssamios.com/dokuwiki/how_do_we_do_software_capitalization_when_we_go_to_agile) for more on this subject.
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 Organizations often have different sources of funding for an IT organization and it is up to the IT organization to ensure that the capacity allocated to work lines up with these funding sources. To track, tags we could be apply Features could be: Organizations often have different sources of funding for an IT organization and it is up to the IT organization to ensure that the capacity allocated to work lines up with these funding sources. To track, tags we could be apply Features could be:
  
-* Customer Projects +  * Customer Projects 
-* Service Projects +  * Service Projects 
-* Base  +  * Base  
-* And so on+  * And so on
  
 ===== Kano Model ===== ===== Kano Model =====
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 Tagging with the Kano model attributes helps us determine whether we are really going after something that excites the customer. Sample tags might include: Tagging with the Kano model attributes helps us determine whether we are really going after something that excites the customer. Sample tags might include:
  
-* Must have +  * Must have 
-* Differentiator +  * Differentiator 
-* Linear +  * Linear 
-* Indifferent +  * Indifferent 
-* Reverse +  * Reverse 
  
 For more information see [Kano Model](https://en.m.wikipedia.org/wiki/Kano_model) For more information see [Kano Model](https://en.m.wikipedia.org/wiki/Kano_model)
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 One product development shop I worked with really wanted us to track truly innovative work separately from maintenance work. Their categories were a combination of a number of notions: One product development shop I worked with really wanted us to track truly innovative work separately from maintenance work. Their categories were a combination of a number of notions:
  
-* Discretionary: General incremental product investments required to address market/customer demand. Also called "new features and/or enhancements". +  * Discretionary: General incremental product investments required to address market/customer demand. Also called "new features and/or enhancements". 
-* Innovation: Truly new work. Investment in a feature that is new to the work or to our offering to the industry / market. Something that we may want to consider for patent application or to mark as a trade secret. +  * Innovation: Truly new work. Investment in a feature that is new to the work or to our offering to the industry / market. Something that we may want to consider for patent application or to mark as a trade secret. 
-* Contractual: Investment fulfilling contractual commitments to a customer. +  * Contractual: Investment fulfilling contractual commitments to a customer. 
-* Platform: Investments supporting upgrades to new operating systems, database versions, web servers, browsers, compilers, and 3rd party components. +  * Platform: Investments supporting upgrades to new operating systems, database versions, web servers, browsers, compilers, and 3rd party components. 
-* Maintenance: Planned investment required to address defects found in fielded releases of the product. +  * Maintenance: Planned investment required to address defects found in fielded releases of the product. 
-* Technical Debt: Investment required to address issues in quality in the code we have in place today: +  * Technical Debt: Investment required to address issues in quality in the code we have in place today: 
-* Release: Activity required to generate software deliverables that is not directly related to development of the deliverable content itself.  +  * Release: Activity required to generate software deliverables that is not directly related to development of the deliverable content itself.  
-* Overhead: Effectively the "other" bucket.+  * Overhead: Effectively the "other" bucket.
  
 You can see that this list is a mix of a number of the ideas above. The problem people have with this type of categorization model is that it is often not clear which category an item belongs to, causing confusion. This approach is generally not recommended. You can see that this list is a mix of a number of the ideas above. The problem people have with this type of categorization model is that it is often not clear which category an item belongs to, causing confusion. This approach is generally not recommended.
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 There are two general approaches used by agilists everywhere: There are two general approaches used by agilists everywhere:
  
-1. Tags: Tag epics, features, or stories with a tag that reflects a category. For example, perhaps we are interested in whether we are investing enough money on “Evaluating” versus “Emerging”. We’d create a (unique) tag that would reflect these values (“Evaluating”, “Emerging”, ..) in our tracking tool. We’d then set up a working agreement within the organization that “all epics need to be tagged with one of these values.” The working agreement will generally specific the lowest level to tag. In the example, above the lowest level is “Epic”. What this means is that we typically would not tag features or stories because, since they are all related to an epic, the category is defined by the epic. +  - Tags: Tag epics, features, or stories with a tag that reflects a category. For example, perhaps we are interested in whether we are investing enough money on “Evaluating” versus “Emerging”. We’d create a (unique) tag that would reflect these values (“Evaluating”, “Emerging”, ..) in our tracking tool. We’d then set up a working agreement within the organization that “all epics need to be tagged with one of these values.” The working agreement will generally specific the lowest level to tag. In the example, above the lowest level is “Epic”. What this means is that we typically would not tag features or stories because, since they are all related to an epic, the category is defined by the epic. 
-2. Initiatives: Sometime executives just want to understand how much is being spent on a particular initiative in relationship to others. If we assume that individual initiatives are modeled as Epics, then the simplest approach is just to link associated features and stories to the epic, and track total work.+  - Initiatives: Sometime executives just want to understand how much is being spent on a particular initiative in relationship to others. If we assume that individual initiatives are modeled as Epics, then the simplest approach is just to link associated features and stories to the epic, and track total work.
  
 A combination of approaches is also used in many cases. A combination of approaches is also used in many cases.
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 In general, I recommend against this approach for a number of reasons: In general, I recommend against this approach for a number of reasons:
  
-* There is a huge overhead to create and maintain this data, which reduces the chance that it will be available for all items +  * There is a huge overhead to create and maintain this data, which reduces the chance that it will be available for all items 
-* The data may feel like it is more precise, but the reality is that it is probably less accurate overall as people typically are guessing at percentages +  * The data may feel like it is more precise, but the reality is that it is probably less accurate overall as people typically are guessing at percentages 
-* There is usually sufficient accuracy in broad categorization to make the decisions required. +  * There is usually sufficient accuracy in broad categorization to make the decisions required. 
-* If you feel there is value in more precise data, tag at the lower level. If tagging epics isn’t giving you the information you need, tag features. Same for features and stories.+  * If you feel there is value in more precise data, tag at the lower level. If tagging epics isn’t giving you the information you need, tag features. Same for features and stories.
  
 ====== What Units Should We Use to Track Investments? ====== ====== What Units Should We Use to Track Investments? ======
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 There are two basic units used by agilists to track proportions of investments: There are two basic units used by agilists to track proportions of investments:
  
-1. Count: of Epics, Features, or Stories +  - Count: of Epics, Features, or Stories 
-2. Size: of Epic points, Feature points, or Story points+  - Size: of Epic points, Feature points, or Story points
  
 In most cases it doesn’t really make a lot of difference what is used. In general I’ve found that a count approach is both simpler and more consistent over the long term. Most organizations are more comfortable using size because this seems like it is an important factor. The reality is that the “law of large numbers” takes over for large implementations so the counts are “good enough” and probably about the same as using size information. In most cases it doesn’t really make a lot of difference what is used. In general I’ve found that a count approach is both simpler and more consistent over the long term. Most organizations are more comfortable using size because this seems like it is an important factor. The reality is that the “law of large numbers” takes over for large implementations so the counts are “good enough” and probably about the same as using size information.
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 Context matters. This page was written out of the following context: Context matters. This page was written out of the following context:
  
-1. Discussion assumes a large scale implementation of agile where senior executives have hundreds of people on teams and they are trying to ensure good governance. +  - Discussion assumes a large scale implementation of agile where senior executives have hundreds of people on teams and they are trying to ensure good governance. 
-2. Some level of “tool” is used to record the information, even if for example this is as simple as free text tag field. +  - Some level of “tool” is used to record the information, even if for example this is as simple as free text tag field. 
-3. Vocabulary assumes a SAFe structure of Epics -> Features -> Stories+  - Vocabulary assumes a SAFe structure of Epics -> Features -> Stories
  
 ====== Want to Know More? ====== ====== Want to Know More? ======
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